Freetrade app

JustAnotherSaver

I generally stay away from shares or at least single company ones.
My brother has had one of his friends in his ear about this app telling him how 'great' it is and how he's made 'x-amount' in the past few months and it's 'free'.


I'm very sceptical.



Looking on HL i'd have to pay to buy a share on top of the actual share cost itself it seems.
So if this app is free ... how do they make their money? Seems too good to be true to me. If it's so free then why doesn't everyone ditch their usual provider and shift to this free app?






But now we have a situation where we're going to have a little wager and see who comes out on top. Nothing bank breaking but still.

So i need to know what the catch is with this thing as there surely must be one. Nothing is that good for free.

eskbanker

Probably worth searching for all the other threads about Freetrade on here but in summary, their product has a limited range of stocks available and charges for some (instant) trades and ISAs. That doesn't mean it's a waste of time though, if your needs and their proposition happen to overlap, but equally it's not for everyone....

Username999

My guess is they make money from increasing the spread.
Similar to the spread bet companies.

Nothing is 'free'.

tin586

Freetrade say they don’t make money from the spread, but they don’t exactly engender confidence in the savvy investor who is not a member of the cult (not having ‘invested’ in the crowdfunding and therefore having no reason to sing their praises on social media).

Below is their response to someone on Trustpilot who complained about an outrageous spread on a liquid ETF:

When you put through your order, we put it out to the market makers and execute it. These market makers may add a spread to the orders they fill. We never add our own additional spread or markup.

Some brokers take an extra step of showing you the actual quote from the market maker before you finalise your trade. We don’t do that. Instead, our system compares the quotes we get against the prices on the exchange and accepts (or rejects) assuming the price is close enough and meets our best execution requirements.

So the execution price of an ‘Instant Trade’ can slip and the investor can’t control that. It’s like taking a loaf of bread to the checkout and being forced to buy it at a higher price than quoted on the shelf because the supermarket deems it “close enough”.

Sobraon

I am using the free trading process to build up my ETF holdings in IWDG and VHYL prior to moving the money in to a X-O ISA in April ( will buy IWDG and VHYL in the ISA).

I use the FT portfolio tool for tracking and when you add a new transaction the FT tool attempts to "fill in" the price for the buy order. I have not noticed an increased spread using Freetrade as compared to HL or iWEB.

gollum007

I think the increased spread he noticed was probably rather an artifact of the fact their price feed displayed in app / on purchase estimates is 15 minute delayed.

This isn't at all helpful, but can be worked around by checking somewhere with current numbers before hitting the trigger.
For that matter, I'm not sure the platform was designed with this sort of daytrading in mind....

Username999

The free trade orders are executed in bulk at 4:00pm daily.
Not sure if you can set limit orders.

JustAnotherSaver

For those who have used these, i put money on my account ('topped up') yesterday. I wasn't surprised it didn't show straight away - it's a bank holiday. I did this via Apple Pay.


It's still not showing there now though. Does it usually take a while?

username901

JustAnotherSaver wrote: »

For those who have used these, i put money on my account ('topped up') yesterday. I wasn't surprised it didn't show straight away - it's a bank holiday. I did this via Apple Pay.


It's still not showing there now though. Does it usually take a while?

Myself and a colleague I recommended both had to have our payments manually added after paying via google pay via live chat - should have been within 4 hours.

Other than that, my experience of the app so far is positive. In the early days they had a very limited range of stocks, now its growing daily (all the stocks I have on my II portfolio are listed), and their roadmap for the next 6 months looks interesting - freetrade alpha, SIPP, new exchanges, trading information and their referral scheme is quite brilliant imo. I've not opened an ISA with them yet, but will be next year.

I'll be ditching Interactive Investor ASAP - they're utterly useless, not looking forward at trying to switch my SIPP away from them.

JustAnotherSaver

Looks like this isn't going to turn out. I guess it's going to be a "well of course" moment for you guys but to me i didn't know....


So i log on this morning and the balance is once again £0.00. In fact i think it was £-.--.

I close the app down. Open up my email app, have a quick browse, finally open up the email from them (Freetrade) i got the other day.

I then re-open the app and voila, my money is showing.


So i go to place the purchase. The share i was looking at was listed at £33.pence. I was starting with £5 since that's the wager i had with my brother - £5 per month in to one share & see who's out on top this time next year. Winner gets [insert amount to be agreed here].



So i thought i'd just be buying £5's worth of the share, so fractions of a share i suppose. If i bought 33 at £1 it'd be 1 share in a sense.



Turns out i can't do that. Each purchase has to be £33 (current price). He could pick a share at £0.20 so it'd cost him less.


I wasn't aware that was the case. I thought i could just put in an amount and it'd buy a fraction of, like how it works when buying in to funds for example (VLS say). Oh well. We'll find something else to wager over then.

Reaper

JustAnotherSaver wrote: »

I wasn't aware that was the case. I thought i could just put in an amount and it'd buy a fraction of, like how it works when buying in to funds for example (VLS say)

No platform will let you directly buy a fraction of a share, that's why we get share splits from time to time to get the price down to a more manageable amount.

As you says funds do not have the same limitation, though they often have minimum purchase amounts instead.

If it's just for a bet a fantasy portfolio might do the trick. Various platforms offer them.